This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014 as retained as part of UK law by virtue of the European Union (Withdrawal) Act 2018 as amended. Upon the publication of this Announcement, this inside information is now considered to be in the public domain.
26 March 2024
ZOO DIGITAL GROUP PLC
("ZOO", the "Group" or the "Company")
Trading Update
ZOO Digital Group plc (AIM: ZOO), a leading provider of end-to-end cloud-based localisation and media services to the global entertainment industry, today provides an update on trading.
Current Trading
Following the trading statement of 24 January 2024, the Company has since received further clarity on timing of projects and is now receiving orders relating to work on feature films and TV shows that have been completed following the industry strikes of 2023 that brought productions to a halt. With January invoicing the highest month since April 2023, the Company is beginning to see an acceleration of its pipeline with work expanding in March and April 2024.
As a result, the Company expects to beat revised market guidance for FY24* with revenues of at least $40 million. Consequently, the anticipated EBITDA loss will be reduced. Net cash on 31 March 2024 is expected to be at least $3 million, also higher than revised market expectations, and although the Company has no debt it intends to renew its current undrawn facilities when they fall due.
Following engagement with its customers, the Company has now secured improved visibility of work, with some extending until September 2024. Many orders are currently in progress and a growing pipeline of further projects over this period has been confirmed. The Company's order book for FY25 Q1 is currently up by 30% on FY24 Q4. This order pipeline from major customers underpins an expectation of a strong recovery in revenues in FY25 H1. Despite the implemented cost savings which have resulted in expected Q1 direct staff costs 30% below the prior year period, the Company is well positioned to take on increased levels of business as the industry reopens.
Appointment by a major film and TV distributor
In February 2024 the Company was appointed by another of the major film and TV distributors as a primary vendor for dubbing in several languages and a preferred partner for subtitling of global languages. The Board expects to receive first firm orders for this new engagement in the coming weeks. Furthermore, due to the strong demand for European dubbing, the Company plans to continue to expand its capabilities in Spain, Italy, and Germany.
Appointment of Senior Independent Director
The Board is pleased to announce that Nathalie Schwarz, who has served as a non-executive director since January 2022, is appointed as the Senior Independent Director. Ms. Schwarz will continue to serve as chair of the Remuneration Committee and member of the Audit Committee.
The persons responsible for arranging for the release of this Announcement on behalf of ZOO are Stuart Green, Chief Executive Officer and Phillip Blundell, Chief Financial Officer of ZOO.
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* The Company understands market consensus for FY24 to be revenue of $37.6 million, EBITDA adjusted for share based payments loss of $14.0 million and net cash of $1.6 million.
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About ZOO Digital Group plc:
ZOO Digital supports major Hollywood studios and streaming services to globalise their content and reach audiences everywhere, by providing leading, technology-enabled localisation and media services.
Founded in 2001, ZOO Digital operates from hubs in Los Angeles, London, Dubai, Turkey, South Korea, India, Denmark and Spain with a development and production centre in Sheffield, UK.
The Group provides media services through its platforms that include: ZOOsubs, ZOOdubs and ZOOstudio. Its full-service proposition delivers the end-to-end services required to prepare both original and catalogue content for digital distribution; these services include dubbing, subtitling & captioning, metadata creation & localisation, mastering, artwork localisation and media processing. Alongside this offering, ZOO also provides its customers with management platforms and strategic solutions to support their own internal globalisation operations.
ZOO is a go-to service partner for media businesses looking to globalise their content across different territories, languages and distribution platforms. Using its innovative technology-enabled approach, ZOO helps its customers to reduce time to market, lower costs and deliver high quality products to their global audiences. The business has frameworks in place with all major Hollywood studios and streaming services. Its customers include Disney, NBCUniversal, HBO and Paramount Global.
ZOO's competitive advantage arises from three interlinking factors - the leading role it has played in the digital transformation of its sector; the world class proprietary platforms that it develops to enable this transformation; and the global supply chain of thousands of freelancers, working collaboratively in ZOO's platforms, which delivers services that scale easily to meet demand. These factors combine to make ZOO uniquely placed to capitalise on new market opportunities in a fast-paced and constantly evolving industry.
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